Hi.
The first item in the list isn’t actually the text “a” ” although it’s logged as that ” but the reference item 1 of “aabbccdd”, since that’s the value of x in the kind of repeat: repeat with x in .. Until recently, coercing a list containing a reference to text only included the items before the reference (if any). That seems to be what’s happening in your case. On my Mountain Lion system (AppleScript 2.2.4), the coercion attempt causes an error: “Can’t make {item 1 of "aabbccdd", "", "", "bbccdd"} into type text.”
Instead of the reference in the list, you should use its contents or it as text:
set text item y in getUniqueCharacters to contents of x
-- Or:
set text item y in getUniqueCharacters to x as text
However, this doesn’t actually make the script work. The output’s exactly the same as the input. I’ll look at it again shortly.